Australian Broker Call

Bell Potter rates A2M as Hold (3) -

Bell Potter highlights shipment data from traditional Synlait Milk ((SM1)) ports have been remarkably softer in the last three months, with rolling 12 months China direct value up 7%, but down -8% from February peak.

The broker reminds there is a high correlation between the trade flows and revenues for a2 Milk Co's PRC label sales.

The analyst updated forecasts for the company after taking into account revised forex, noting a 4% rally in the NZD/CNY exchange rate since its April update.

FY25-27 net profit forecasts lowered by around -1%. Hold. Target unchanged at $7.85.

Target price is $7.85 Current Price is $7.84 Difference: $0.01
If A2M meets the Bell Potter target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.40, suggesting downside of -5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates AD8 as Overweight (1) -

Morgan Stanley believes Audinate Group's acquisition of Iris Studios makes strategic sense as it will upgrade video functionality for end users and is complementary to the company's key verticals.

The broker notes the Iris Studios' white-label launch was in April and the public launch is slated for September. The company is paying -US$20m cash and -US$8m contingent.

Overweight. Target unchanged at $11. Industry View: In-Line.

Target price is $11.00 Current Price is $7.10 Difference: $3.9
If AD8 meets the Morgan Stanley target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $9.41, suggesting upside of 31.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates AD8 as Neutral (3) -

Audinate Group will acquire US-based Iris Studio Inc for up to -US$28m, comprising -US$20m upfront and up to -US$8m earn-out, with half payable in Audinate shares.

UBS expects the acquisition will enhance the company's video capabilities and accelerate its strategy to develop an interoperable AV platform.

Iris Studio offers a cloud-based remote video production SaaS solution with AI-powered tools and integration with 14 camera brands, aligning with Dante’s existing customer base, observe the analysts.

Management will continue investing in Iris to support commercialisation, with meaningful free cash flow contributions anticipated within 3–4 years.

UBS retains a Neutral rating and maintains its $10.85 target price.

Target price is $10.85 Current Price is $7.10 Difference: $3.75
If AD8 meets the UBS target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $9.41, suggesting upside of 31.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates AMC as Outperform (1) -

Macquarie notes Amcor is looking at "portfolio pruning" as the Berry operations are combined, which offers scope to enhance margins and lower gearing.

Regarding the legacy Amcor businesses, the analyst views possible asset sales in the rigids segment as that segment has continued to underperform flexibles for several years.

Macquarie assumes management will sell between 5% to 10% of group sales, which would lower EPS estimates by -2% to -4% and reduce leverage by -0.15x to -0.5x.

The broker emphasises the company has a good track record of delivering on synergy rationalisation, as per the Alcan and Bemis acquisitions.

Macquarie tweaks EPS forecasts and target price moves to $18.35 from $18.16. No change to Outperform rating.

Target price is $18.35 Current Price is $14.19 Difference: $4.16
If AMC meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $17.26, suggesting upside of 23.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates ANG as Buy (1) -

Bell Potter notes Austin Engineering lifted its FY25 revenue guidance to $370m from $350m, but cut the EBIT guidance to $41m from $50m.

The revenue lift is due to strong orders, both in North and South America. However, in South America margins are under pressure as the additional orders were met with contract labour because of stretched capacity at the factory.

The broker lowered the EBITDA forecast for South America, resulting in a -14.1% cut to the company's FY25 EBITDA forecast and a -5% cut to FY26.

Revenue forecast lifted by 3.7% for FY25 and by 2.8% for FY26. Buy. Target cut to 60c from 85c.

Target price is $0.60 Current Price is $0.32 Difference: $0.28
If ANG meets the Bell Potter target it will return approximately 87% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates ANZ as Hold (3) -

Excluding CommBank ((CBA)) (given a recent update by the broker), Ord Minnett has upgraded its net interest margin (NIM) forecasts for the other big three banks.

The broker explains the change is driven by interest rate cut timing benefits, deposit repricing, and a narrower BBSW–risk-free overnight rate (OIS) spread.

Westpac benefits most from rate cut timing due to its longer 14-day processing lag, highlights Ord Minnett.

Only minor EPS forecast changes have been made by the broker following the review.

Ord Minnett remains negative on the banking sector due to persistent margin pressure, intense competition, and stretched valuations.

For ANZ Bank, the Hold rating and $27.50 target are unchanged.

Target price is $27.50 Current Price is $29.10 Difference: minus $1.6 (current price is over target).
If ANZ meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.67, suggesting downside of -10.3% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates AZJ as Neutral (3) -

Aurizon Holdings has effectively issued another profit warning this morning, but early commentary by Citi analysts suggests it's not genuinely a surprise and likely not as bad as could've been.

FY25 underlying EBITDA is now guided toward $1,575M. Citi believes this is circa -2% below consensus, driven by lower network volumes and Bulk contract receivables.

The broker suggests the market is likely to look through the Network 'miss' given regulatory recovery mechanisms in future years.

But the Bulk business looks set for a change, with current CFO George Lippiatt switching to lead the under-performing business, commentary highlights, replacing Anna Dartnell who has led Bulk since 2023.

Target $3.40. Neutral.

Target price is $3.40 Current Price is $3.00 Difference: $0.4
If AZJ meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.31, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates BSL as Neutral (3) -

Citi questions the durability and efficacy of higher US steel prices from tariffs, with the broker's US economists noting sentiment remains low, with consumers concerned about business, employment, and income, with potential for a slowing economy as indicated by tempered house prices.

The analyst points to question marks around what price investors will pay for BlueScope Steel's US steel earnings, with rising steel exports and increasing domestic supply.

Citi lfts EPS estimates by 3.7% for 2025 and 1.8% for 2026.

Neutral rating unchanged. Target price trimmed to $25 from $26.50 despite a lift in earnings estimates for BlueScope, as the analyst views the valuation PER multiple as compressing.

Target price is $25.00 Current Price is $22.44 Difference: $2.56
If BSL meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $27.04, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates CKF as Buy (1) -

UBS assesses Collins Foods delivered a strong FY25 result, with underlying profit of $51m beating the broker's forecast by 22% and consensus by 15%.

Outperformance was driven by resilient earnings from KFC Europe and a notable turnaround in KFC Australia’s second-half earnings margins, explain the analysts.A boost was also provided by input cost deflation and early productivity gains.

FY26 guidance for low to mid-teens profit growth was reiterated, but UBS sees potential upside from full-year benefits of margin improvements, favourable currency, and lower D&A in Europe following a -$50m impairment.

Taco Bell remains a drag, highlights the broker, with FY25 earnings (loss) of -$1.6m, though management plans to exit the business within 12 months.

UBS raises its target price to $9.75 from $9.20 and retains a Buy rating.

Target price is $9.75 Current Price is $9.22 Difference: $0.53
If CKF meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $9.91, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates DRO as Buy (1) -

DroneShield announced three contracts from a European military client totalling $61.6m, taking the total contracted revenue in FY25 to $161m. This is higher than Bell Potter's forecast of $140m.

The company reported revenue of $33.5m in 1Q25, and the broker expects $70m in 1H, which is higher than full FY24 revenue of $57.5m.

Material upgrades to forecasts with FY25/26/27 revenue estimates lifted by 40%/38%/36%, respectively. Buy. Target jumps to $2.60 from $1.50.

Target price is $2.60 Current Price is $2.14 Difference: $0.46
If DRO meets the Bell Potter target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates DRO as Downgrade to Hold from Buy (3) -

The June update from DroneShield showed a sharp increase in secured revenue to $161m from $100m in May, thanks to a $61.6m European handheld systems order. 

Shaw and Partners notes the pipeline also increased to $2.41bn from $2.34bn in May, and cash lifted to $198m. With Europe representing 46% of the pipeline due mainly to NATO defence spending, the company reiterated its plan for an EU assembly hub.

The broker lifted FY25-27 forecasts significantly, leading to a rise in the target price to $2.00 from $1.20. Rating downgraded to Hold, High Risk from Buy.

Target price is $2.00 Current Price is $2.14 Difference: minus $0.14 (current price is over target).
If DRO meets the Shaw and Partners target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates FBU as Underperform (5) -

Fletcher Building's updates at its investor day highlighted few prospects of tailwinds in the NZ residential, commercial or infrastructure volumes until FY27, Macquarie explains.

Management also introduced a new reduced debt target and has suspended dividends until this is achieved, with the analyst expecting dividends to be reinstated in FY28 rather than FY26 (as forecast previously).

Macquarie lowers EPS forecasts by -3%, -5% and -1% for FY25–FY27. The stock continues to be rated Underperform with target price slipping to NZ$1.80 from NZ$1.85.

Current Price is $2.67. Target price not assessed.

Current consensus price target is $3.04, suggesting upside of 13.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates GGP as Initiation of coverage with Neutral (3) -

Citi initiates coverage on Greatland Resources with a Neutral rating and $8 target price.

The miner has recently taken over Telfer, which achieved free cash flow of circa $250m in the March quarter, while also revealing Telfer’s mine life potential under a higher gold price backdrop.

The analyst highlights a feasibility study for Havieron is due by the end of 2025 and is one of Australia’s highest-grade and largest undeveloped greenfields projects, with scope to achieve 220–319kozpa at a first quartile all-in-sustaining-cost of under US$1,000/oz.

Target price is $8.00 Current Price is $0.01 Difference: $7.994
If GGP meets the Citi target it will return approximately 133233% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates GQG as Buy (1) -

UBS identifies potential index inclusion into the ASX200 as a key upcoming catalyst for GQG Partners, which has a market cap above $6bn but remains excluded due to a free float of only circa 26%.

S&P Dow Jones Indices is currently consulting on a rule change to lower the free-float requirement to 15% from 30%. The broker explains this would allow GQG to qualify without requiring a shareholder sell-down or secondary issuance.

If approved, the change could take effect with the September 2025 index rebalancing, with UBS estimating passive buying of around 51.4m shares, or around 13.5–15 trading days' worth of volume.

The broker highlights no structural changes would be required for inclusion, and notes continued share purchases by GQG’s Chairman and CIO in 1H25.

The Buy rating and $2.80 target are unchanged.

Target price is $2.80 Current Price is $2.27 Difference: $0.53
If GQG meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.86, suggesting upside of 28.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates HCW as Buy (1) -

HealthCo Healthcare & Wellness REIT's portfolio revaluation resulted in a -89m fall in book value, down -5.8% versus the preceding half-year.

The REIT didn't update guidance given the Healthscope administration, after previously withdrawing it. At the end of May, Healthscope had paid all outstanding rental arrears and 85% of the May and June rents.

Bell Potter revised its forecasts, resulting in -5.3% cut to FY25 FFO and -9.1% cut to FY26. Dividend forecasts lowered by -50% for both FY25 and FY26.

Buy. Target cut to $1.15 from $1.30.

Target price is $1.15 Current Price is $0.77 Difference: $0.385
If HCW meets the Bell Potter target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $1.00, suggesting upside of 29.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates HUM as Buy, High Risk (1) -

The family office of Humm Group chairman Andrew Abercrombie --The Abercrombie Group (TAG)-- made a non-binding indicative offer to acquire the company for 58c/share, adjusted for dividends.

Shaw and Partners believes the offer price is below the sector valuation, and it is plausible TAG is testing the waters. The broker notes Abercrombie already owns 26.6% of the company, so it will only be the three independent directors who will consider the offer.

The analyst estimates holders with 17-18% stake other than Abercrombie will be needed to block the transaction.

Buy, High Risk. Target unchanged at 90c. 

Target price is $0.90 Current Price is $0.54 Difference: $0.365
If HUM meets the Shaw and Partners target it will return approximately 68% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates LNW as Buy (1) -

Citi explains the District Court of Nevada has updated the discovery dispute between Light & Wonder and Aristocrat Leisure ((ALL)), with the minutes pointing to Aristocrat not being given access to Light & Wonder's hold and spin math models since 2021.

The analyst assesses this as more challenging for Aristocrat to prove "contagion" of trade secrets to its competitor's titles beyond Dragon Train.

Citi does anticipate Light & Wonder will need to pay damages to Aristocrat due to the former injunction.

The stock remains Buy rated.

Target price is $193.00 Current Price is $142.20 Difference: $50.8
If LNW meets the Citi target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $194.00, suggesting upside of 32.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates NAB as Lighten (4) -

Excluding CommBank ((CBA)) (given a recent update by the broker), Ord Minnett has upgraded its net interest margin (NIM) forecasts for the other big three banks.

The broker explains the change is driven by interest rate cut timing benefits, deposit repricing, and a narrower BBSW–risk-free overnight rate (OIS) spread.

Westpac benefits most from rate cut timing due to its longer 14-day processing lag, highlights Ord Minnett.

Only minor EPS forecast changes have been made by the broker following the review.

Ord Minnett remains negative on the banking sector due to persistent margin pressure, intense competition, and stretched valuations.

For National Australia Bank, the Lighten rating and $33 target are unchanged.

Target price is $33.00 Current Price is $40.05 Difference: minus $7.05 (current price is over target).
If NAB meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.17, suggesting downside of -17.1% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates NST as Buy (1) -

Citi explains capex expectations for FY26 have risen by around $1bn to $2.6bn excluding exploration over the prior 12 months, as the market seeks to factor in higher ongoing sustaining and mining costs.

The analyst has raised capex forecasts to align with consensus for FY26 to $2.4bn, excluding an exploration spend of $200m-plus, as there have been upward revisions on Thunderbox of $120m, KCGM of $435m, and Jundee of $90m.

Buy rating and $22.50 target unchanged.

Target price is $22.50 Current Price is $19.28 Difference: $3.22
If NST meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $22.49, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates NXT as Outperform (1) -

Macquarie restates an upbeat assessment for NextDC's outlook, stressing Australia has a robust strategic position in the development of data centres in the APAC region with the fastest growing cloud in the world.

The analyst believes the news flow for the company will remain "elevated" over the next two to four years due to growth in hyperscalers, such as Amazon's recent update, as well as interest from Google, Oracle and Bytedance.

Governments are also committed, with the Federal policy more disposed to digital infrastructure and state governments like NSW having created an Infrastructure Delivery Authority to expedite the approval and development process announced at NextDC's S3 data centre.

There is also pent-up AI demand due to chip availability challenges. Macquarie sees demand for data centres could grow over 1.8GW in the next five years.

Macquarie lifts EPS estimates by 4%, 30% and 40% for FY25–FY27, respectively. Target price lifts to $22.10 with an Outperform rating.

Target price is $22.10 Current Price is $14.25 Difference: $7.85
If NXT meets the Macquarie target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $19.72, suggesting upside of 37.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates PGC as Buy (1) -

Bell Potter notes Paragon Care has appointed the current COO Carmen Riley as the new CEO, effective July 1, replacing CEO and MD David Collins.

Collins will stay on as MD until June 2026 before handing the position too to Riley. The broker expects no change in the company's operations, with strong cost control likely to remain the focus.

The company has completed a significant part of the merger with CH2, and Collins' key role will be to focus on M&A opportunities in the next 12 months.

The broker expects any acquisition to be debt-funded and no worse than EPS neutral within 12 months of ownership. Buy. Target unchanged at 52c.

Target price is $0.52 Current Price is $0.35 Difference: $0.17
If PGC meets the Bell Potter target it will return approximately 49% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates PRN as Buy (1) -

Citi highlights Perenti has secured an underground contract at Westgold's ((WGX)) Great Fingall project with around $67m average revenue generation over the next three years.

The Fingall contribution represents around 3% of the analyst's FY26 underground revenue forecast, and assuming a circa 8.5% margin, the project could add around $5.7m in earnings (EBITA) per annum, which infers around 35% of capex growth needed.

Citi believes this reaffirms Perenti's "disciplined" take on capital use, and a mine life of circa 8 years underscores the potential for additional extensions to the contract.

The stock is Buy rated. Target $1.90.

Target price is $1.90 Current Price is $1.57 Difference: $0.335
If PRN meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $1.62, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates SRG as Buy, High Risk (1) -

SRG Global has bagged contracts totalling $850m across Australia and New Zealand in diverse sectors ranging from water, energy, to health and education. Total contract wins in FY25 stood at $1.8bn, sharply higher than $780m in FY24.

Shaw and Partners lifted FY26-27 EPS forecasts by 5.2% and 5.1%.

Buy, High Risk. Target rises to $1.80 from $1.60.

Target price is $1.80 Current Price is $1.70 Difference: $0.1
If SRG meets the Shaw and Partners target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.68, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.9

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates TEA as Buy (1) -

Tasmea enters FY26 with a record $600m order book and guides to $110m of earnings (EBIT) and profit of $70m, 6% and 10%, respectively, ahead of the broker's prior forecasts.

Guidance suggests Tasmea will reach its FY27 long-term incentive earnings target a year early, highlights the broker, supported by secured work and recurring revenue, which provides strong earnings visibility.

Morgans expects Tasmea to benefit significantly from Rio Tinto’s ((RIO)) upcoming $13bn capex cycle from 2025-2027.

The company has a strong presence in iron ore projects such as Hope Downs 2 and Brockman Syncline, which management flagged as key growth drivers.

Morgans raises its target price to $4.35 from $3.80 and retains a Buy rating.

Target price is $4.35 Current Price is $3.74 Difference: $0.61
If TEA meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates TEA as Buy, High Risk (1) -

Tasmea reiterated its FY25 net profit guidance, but the FY26 guidance for revenue was 6% above consensus and for net profit it was 9% ahead.

Shaw and Partners notes the company's contract book is at a record $600m for FY26 vs $465m for FY25.

The company has a long-term incentive plan for its team members, with participation from 100 of them, and the broker highlights it is a reflection of management's outlook and strategy.

FY26 EPS forecast lifted by 9.5% and FY27 by 9.7%. Buy, High Risk. Target rises to $4.10 from $3.00.

Target price is $4.10 Current Price is $3.74 Difference: $0.36
If TEA meets the Shaw and Partners target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates TWE as Buy (1) -

Treasury Wine Estates reaffirmed FY25 guidance but flagged softer FY26 earnings expectations, especially for Treasury Americas, due to macro headwinds and modest growth from Daou Vineyards, explains Morgans.

Penfolds remains the group's core earnings driver and is on track for low double-digit earnings (EBITS) growth in FY25, notes the broker.

Guidance for FY26 has been revised to low to mid double-digits from circa 15% prior, reflecting increased investment in Asian markets.

The analysts highlight Treasury Americas’ FY26 outlook as disappointing, with Daou expected to underperform its medium-term net sales revenue (NSR) growth target.

Broader luxury brands are also likely to post earnings declines due to inventory rebalancing and soft US demand, explains Morgans.

Treasury Collective, (a new segment starting July 1), contributing 13% of group earnings, is showing signs of stabilisation, with FY25 earnings expected to be moderately ahead of guidance.

This new division will house brands including 19 Crimes, Matua, Squealing Pig, Wynns, Wolf Blass, and Lindemans.

Morgans reduces its FY26 earnings forecasts by -5.1%. The target falls $10.25 from $11.06. Buy rating unchanged.

Target price is $10.25 Current Price is $7.84 Difference: $2.41
If TWE meets the Morgans target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $9.58, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates WBC as Lighten (4) -

Excluding CommBank ((CBA)) (given a recent update by the broker), Ord Minnett has upgraded its net interest margin (NIM) forecasts for the other big three banks.

The broker explains the change is driven by interest rate cut timing benefits, deposit repricing, and a narrower BBSW–risk-free overnight rate (OIS) spread.

Westpac benefits most from rate cut timing due to its longer 14-day processing lag, highlights Ord Minnett.

Only minor EPS forecast changes have been made by the broker following the review.

Ord Minnett remains negative on the banking sector due to persistent margin pressure, intense competition, and stretched valuations.

For Westpac, the Lighten rating and $27 target are unchanged.

Target price is $27.00 Current Price is $34.54 Difference: minus $7.54 (current price is over target).
If WBC meets the Ord Minnett target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.98, suggesting downside of -16.2% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates XRO as Buy (1) -

Citi emphasises the Melio acquisition makes strategic sense with multiple positives for Xero, including the ability to move into the '3x3' jobs-to-be-done in the US expansion, the broker states, which refers to three categories, accounting, payroll & payments business across three geographies North America, Australasia and UK.

Melio also offers relationships with banks which should enable Xero to access the channel for accounting growth.

The analyst highlights Xero's revenue guidance for FY28 is to more than double, which is an upgrade to consensus estimates by 15%-plus.

Melio is noted for being more exposed to SMEs with ARPU of US$250 per month against Xero at US$180.

Xero's share price is expected to come under pressure due to the valuation being paid for the acquisition and the free cash flow margin dilution, but Citi believes Melio will assist in scaling the US business.

Buy rated with $210 target.

Target price is $210.00 Current Price is $194.21 Difference: $15.79
If XRO meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $211.50, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates XRO as Outperform (1) -

Macquarie highlights Xero's Melio acquisition is a US-based payments platform that provides digital accounts payable and receivable solutions focusing on the SMB market. It also has exposure to accountants and bookkeepers with revenue from transaction fees.

The analyst explains Melio offers Xero US subs growth, and the US payments market is a "large" revenue opportunity with a total addressable market of US$29bn. The risk in the medium term, Macquarie stresses, is the inability to achieve US growth.

Melio is also believed to be under-monetised, so it can generate growth with lower incentive pricing for more volume expansion. There is scope for margin expansion from higher-margin syndication, states the broker, and subscription revenues.

No change to earnings forecasts until the deal closes. Outperform rating is reiterated and $204 target remains

Target price is $204.00 Current Price is $194.21 Difference: $9.79
If XRO meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $211.50, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates XRO as Overweight (1) -

Morgan Stanley sees strategic merit in Xero's acquisition of Melio as it will further enhance the company's strategy by bringing together accounting and payments into a single platform.

The $4bn acquisition is equal to 12% of the company's economic value (EV) and the price paid is high, but the risk/return scenarios are attractive, according to the broker.

Leverage will increase to 2.3x net debt/EBITDA and the broker expects meaningful post-transaction free cash flow to help with deleveraging.

The bullish scenario, in the broker's view, is the company using the Melio platform to reach 30m self-employed businesses where cloud penetration is low.

Overweight. Target unchanged at $225. Industry View: Attractive.

Target price is $225.00 Current Price is $194.21 Difference: $30.79
If XRO meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $211.50, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates XRO as Accumulate (2) -

Xero is acquiring Melio in the US for -US$2.5bn in cash and scrip, Ord Minnett notes. The company is a payment solutions provider to SMBs and is viewed as a good strategic move for Xero.

The transaction will be funded via a $1.85bn share placement at $176, as well as a US$400m credit facility and US$600m from cash reserves.

Ord Minnett highlights Melio is anticipated to lift FY28 revenue by 100%, which is above previous market expectations of $3.6bn at $4.2bn.

The analyst likes the acquisition and believes it is strategically sound and dovetails well into Xero's '3x3' strategy to grow three core product groups —accounting, payroll, and payments— in three core markets: North America, the UK, and Australia.

Stock is Accumulate rated with a $200 target price. Ord Minnett lowers EPS estimates by -17.9% in FY26 and -36.3% in FY27 and lifts FY28 by 0.8%.

Target price is $200.00 Current Price is $194.21 Difference: $5.79
If XRO meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $211.50, suggesting upside of 14.5% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates XRO as Buy (1) -

Xero has bid -US$2.5bn to acquire Melio, a US bill payments platform with FY25 revenue of US$153m and a free cash flow (FCF) loss of -US$88m. There is a US$400m earn-out possible over the next three years.

The deal values Melio at 13.4 times annualised March 2025 sales, or 9.7 times including an estimated US$70m in revenue synergies by FY28, notes UBS.

The broker views the transaction as aligned with Xero’s 3x3 strategy by expanding US payments capabilities and strengthening its syndicated accounting presence, targeting a US$29bn total adressable market (TAM).

Management maintains FY26 opex guidance and raises FY28 goals to more than double FY25 revenue and surpass the Rule of 40, with peak leverage forecast at 2.3 times net debt/EBITDA.

UBS retains a Buy rating and keeps its price target unchanged at $215.

Target price is $215.00 Current Price is $194.21 Difference: $20.79
If XRO meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $211.50, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources